Given its ambitious renewable energy targets and favourable business environment, India has become a key destination for foreign investments. According to Renewable Watch Research, in the past five years, over 100 foreign investment deals have taken place. The cumulative amount of these investments is around $16,000 million (excluding select deals with undisclosed investments).
In 2016, the biggest deal value was ReNew Power’s green bond issue of Rs 5 billion. Yes Bank’s $50 million green bond issue from FMO was another big highlight. The biggest asset acquisition was Guayama PR Holdings BV, an investment vehicle of GE Energy Financial Services, acquiring a 49 per cent stake in Mytrah Vayu (Tungabhadra) Private Limited (a 200 MW wind energy project in Andhra Pradesh) for $31 million. The most active company was Suzlon Energy. It sold a 49 per cent stake in Amun and Avingha Solar Farms (30 MW) and Rudra Solarfarms to Canadian Solar ($3.6 million) and AMP Solar ($1.97 million), respectively.
In 2017, Actis Capital’s undisclosed stake in Solenergi Power for $500 million was the biggest private equity deal during the year. Globevestor’s undisclosed stake in Oorjan Cleantech for Rs 29 million was another key equity deal. A major highlight of the year was the entry of pension funds in India’s renewable energy industry. In this space, the spotlight was on the Canada Pension Plan Investment Board’s (CPPIB) $144 million minority stake in ReNew Power. The latter also raised $200 million from JERA for a 10 per cent stake. Other highlights were CleanMax raising $100 million and $15 million from Warburg Pincus and IFC respectively. IFC also invested $125 million in Hero Future Energies for 1 GW of solar and wind power projects.The key green bonds issued were by Azure Power, REC, NTPC, PFC and IREDA. The Macquarie Asia Infrastructure Fund’s 100 per cent acquisition of Hindustan Powerprojects’ 330 MW of operational solar assets for $600 million was the biggest asset acquisition deal.
In 2018, the key development was the Euro 240 million investment by Lightsource BP and the Everstone Group to create a fund management platform, EverSource Capital. CDPQ’s $368 million investment in CLP India for a 40 per cent stake was an important deal. CDPQ also invested $100 million in Azure Power, increasing its share to 40 per cent. CPPIB was also active during the year. It bought an undisclosed stake in ReNew Power for $247 million to be used for the latter’s acquisition of Ostro Energy. Sovereign wealth funds GIC and the Abu Dhabi Investment Authority (ADIA) agreed to invest significant amounts in Greenko to support its round-the-clock projects. In the rooftop solar space, Fourth Partner Energy raised investments from TPG Growth; Orb Energy from the Netherlands Development Finance Corporation, Pamiga and DEG; Zunroof from I3N; and Freyr Energy from C4D Partners. The State Bank of India’s $650 million green bond was the biggest bond of the year.
In 2019, Avaada Energy, Greenko, Hero Future Energies and Azure Power were active in raising a significant amount of funds. Avaada Energy raised funds from ADB, DEG, FMO and Proparco; Greenko from GIC and, ADIA; Hero Future Energies from Masdar; and Azure Power from CDPQ. Other key highlights were investments by global fossil fuel companies. While Petronas bought a 100 per cent stake in Amplus Solar, Shell invested in Punjab Renewable Energy Systems Private Limited and Orb Energies. During the year, ReNew Power, Adani Green Energy and Tata Cleantech Capital issued green bonds.
In 2020, investments by fossil fuel companies continued. TotalEnergies bought a 50 per cent stake in 2,148 MW of solar power projects held by Adani Green Energy Limited for $510 million. Petronas acquired Acme’s 100 MW Pavagada Solar Park for $109 million and BP invested $70 million in India’s Green Growth Equity Fund (GGEF). Ayana Renewables raised equity from the CDC Group and GGEF. Meanwhile, KKR launched Virescent Infrastructure, a platform to acquire renewable energy assets in India, and acquired five projects from Shapoorji Pallonji Infrastructure Capital. Singapore state investment firm Temasek and Sweden’s EQT committed $500 million equity capital to the renewable energy platform O2 Power, whereas ReNew Power and CLP India issued green bonds. In 2021, the biggest foreign investment deal has been the Orix Corporation’s 21.8 per cent stake in Greenko for $961 million. Actis signed an agreement to buy Fortum’s 500 MW of solar projects in India for around Euro 280 million. Further, Fourth Partner Energy raised equity from Norfund ($100 million), the CDC Group (Rs 2.5 billion) and The Rise Fund ($25 million). CleanMax raised $223 million from Augment Infrastructure and AMP Energy India raised $100 million from Copenhagen Infrastructure Partners.
This is just a glimpse of the foreign investments in the Indian renewable energy space. Many more domestic financing deals have been signed during these years. Going forward, it is expected that the manufacturing and green hydrogen industries will be the focus of foreign investments and many foreign firms will divest their shares in the Indian market.
According to Renewable Watch Research, in the past five years, over 100 foreign investment deals have taken place. The cumulative amount of these investments is around $16,000 million (excluding select deals with undisclosed investments)
By Sarthak Takyar